[Federal Register Volume 76, Number 83 (Friday, April 29, 2011)]
[Notices]
[Pages 24024-24025]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-9986]


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FEDERAL RESERVE SYSTEM

[Docket Number OP-1418]


Request for Information Relating to Studies Regarding the 
Resolution of Financial Companies Under the Bankruptcy Code

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Notice and request for information.

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SUMMARY: Section 216 of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (the ``Dodd-Frank Act'') requires the Board, in 
consultation with the Administrative Office of the United States Courts 
(the ``AOUSC''), to conduct a study regarding the resolution of 
financial companies under Chapter 7 or Chapter 11 of the United States 
Bankruptcy Code (Title 11, U.S. Code) (the ``Bankruptcy Code''). 
Section 217 of the Dodd-Frank Act requires the Board, in consultation 
with the AOUSC, to conduct a study regarding international coordination 
relating to the resolution of systemic financial companies under the 
Bankruptcy Code and applicable foreign law. Section 216 and Section 217 
of the Dodd-Frank Act each identifies specific issues that are to be 
studied under the relevant section. The Board is issuing this request 
for information through public comment to assist the Board in 
conducting these studies.

DATES: Comment due date: May 31, 2011.

ADDRESSES: You may submit comments, identified by Docket No. OP-1418, 
by any of the following methods:
    <bullet> Agency Web Site: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#30425557431e535f5d5d555e4443705655545542515c425543554246551e575f46"><span class="__cf_email__" data-cfemail="06746361752865696b6b63687275466063626374676a7463756374706328616970">[email protected]</span></a>. Include the 
docket number in the subject line of the message.
    <bullet> Fax: (202) 452-3819 or (202) 452-3102.
    <bullet> Mail: Address to Jennifer J. Johnson, Secretary, Board of 
Governors of the Federal Reserve System, 20th Street and Constitution 
Avenue, NW., Washington, DC 20551.
    All public comments will be made available on the Board's Web site 
at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as 
submitted, unless modified for technical reasons. Accordingly, comments 
will not be edited to remove any identifying or contact information. 
Public comments may also be viewed electronically or in paper in Room 
MP-500 of the Board's Martin Building (20th and C Streets, NW.) between 
9 a.m. and 5 p.m. on weekdays.

FOR FURTHER INFORMATION CONTACT: Sophia Allison, Senior Counsel (202/
452-3565), or Gillian Burgess, Senior Attorney (202/736-5564), Legal 
Division; for users of Telecommunications Device for the Deaf (TDD) 
only, contact (202/263-4869); Board of Governors of the Federal Reserve 
System, 20th and C Streets, NW., Washington, DC 20551.

SUPPLEMENTARY INFORMATION:

I. Background

    The Dodd-Frank Act was enacted on July 21, 2010. Under Section 216 
of the Dodd-Frank Act, the Board is required to conduct a study, in 
consultation with the AOUSC, regarding the resolution of financial 
companies under Chapter 7 or Chapter 11 of the Bankruptcy Code (the 
``Section 216 Study''). Section 216 specifies five specific issues that 
are to be included in the Section 216 Study (124 Stat. 1519) Pub. Law 
111-203, JULY 21, 2010. These issues generally are: (1) The 
effectiveness of the Bankruptcy Code in resolving systemic financial 
companies, (2) whether a special resolution court or panel for 
financial companies should be established, (3) whether amendments 
should be made to the Bankruptcy Code for dealing with financial 
companies, (4) whether the way that qualified financial contracts 
(QFCs) of financial companies in resolution are treated should be 
changed; and (5) whether a special chapter of the Bankruptcy Code for

[[Page 24025]]

dealing with financial companies should be created.
    Section 217 of the Dodd-Frank Act requires the Board, in 
consultation with the AOUSC, to conduct a study regarding international 
coordination relating to the resolution of systemic financial companies 
under the Bankruptcy Code and applicable foreign law (the ``Section 217 
Study''). Section 217 specifies four specific issues that are to be 
included in the Section 217 Study. These issues generally are: (1) 
Whether international coordination exists, (2) the facilitation of such 
international coordination; (3) the barriers to such coordination; and 
(4) the ways to improve such coordination.

II. Solicitation for Comments on the Bankruptcy Studies

    To assist the Board in conducting the Section 216 Study and the 
Section 217 Study, the Board seeks public comment on the following 
questions:
    1. With respect to the Section 216 Study, how should the Board 
address the following areas, taking into account among other things the 
enactment of Title II of the Dodd-Frank Act?
    (i) The effectiveness of chapter 7 and chapter 11 of the Bankruptcy 
Code in facilitating the orderly resolution or reorganization of 
systemic financial companies;
    (A) The key factors and considerations that should be taken into 
account in assessing the ``effectiveness'' of the Bankruptcy Code in 
facilitating the orderly resolution or reorganization of systemic 
financial companies;
    (B) The key factors and considerations that should be taken into 
account in assessing whether the Bankruptcy Code is effective in 
facilitating the ``orderly'' resolution or reorganization of systemic 
financial companies;
    (C) The extent to which the effectiveness of the Bankruptcy Code in 
facilitating the orderly resolution or reorganization of ``systemic 
financial companies'' differs from the effectiveness of the Bankruptcy 
Code in facilitating the orderly resolution or reorganization of non-
systemic financial companies;
    (ii) Whether a special financial resolution court or panel of 
special masters or judges should be established to oversee cases 
involving financial companies to provide for the resolution of such 
companies under the Bankruptcy Code, in a manner that minimizes adverse 
impacts on financial markets without creating moral hazard;
    (A) The ``adverse impacts on financial markets'' that would be 
minimized by the establishment of such a court or panel;
    (B) How establishing such a court or panel would minimize ``moral 
hazard;''
    (C) The key factors and considerations that should be taken into 
account in assessing whether the establishment of such a court or panel 
would minimize such adverse impacts without creating such moral hazard;
    (iii) Whether amendments to the Bankruptcy Code should be adopted 
to enhance the ability of the Code to resolve financial companies in a 
manner that minimizes adverse impacts on financial markets without 
creating moral hazard;
    (A) The ``adverse impacts on financial markets'' that would be 
minimized by amendments to the Bankruptcy Code;
    (B) How such amendments would minimize ``moral hazard;''
    (C) The specific amendments to the Bankruptcy Code that would 
minimize such adverse impacts without creating such moral hazard;
    (D) The key factors and considerations that should be taken into 
account in assessing whether such amendments to the Bankruptcy Code 
would minimize such adverse impacts without creating such moral hazard;
    (iv) Whether amendments should be made to the Bankruptcy Code, the 
Federal Deposit Insurance Act, and other insolvency laws to address the 
manner in which qualified financial contracts of financial companies 
are treated;
    (A) The specific amendments to the Bankruptcy Code, the Federal 
Deposit Insurance Act, and other insolvency laws that might be made to 
address the manner in which qualified financial contracts of financial 
companies are treated;
    (B) The key factors and considerations that should be taken into 
account in assessing whether such amendments to the Bankruptcy Code, 
the Federal Deposit Insurance Act, and other insolvency laws should be 
made;
    (C) The key factors and considerations that should be taken into 
account in assessing the likely outcome of making or not making such 
amendments;
    (v) The implications, challenges, and benefits to creating a new 
chapter or subchapter of the Bankruptcy Code to deal with financial 
companies;
    (A) The key factors and considerations that should be taken into 
account in assessing whether a new chapter or subchapter of the 
Bankruptcy Code should be created to deal with financial companies;
    (B) The benefits that might result from the creation of a new 
chapter or subchapter of the Bankruptcy Code to deal with financial 
companies;
    (C) The extent to which such benefits would not be likely to be 
obtained without creating such a new chapter or subchapter;
    (D) The challenges that might be faced by creating a new chapter or 
subchapter of the Bankruptcy Code to deal with financial companies; and
    (E) The key factors and considerations that should be taken into 
account in assessing the likely outcome of creating or not creating a 
new chapter or subchapter of the Bankruptcy Code to deal with financial 
companies.
    2. With respect to the Section 217 Study, how should the Board 
address the following areas?
    (i) The extent to which international coordination currently 
exists;
    (ii) Current mechanisms and structures for facilitating 
international cooperation;
    (iii) Barriers to effective international coordination; and
    (iv) ways to increase and make more effective international 
coordination of the resolution of financial companies, so as to 
minimize the impact on the financial system without creating moral 
hazard.
    3. With respect to both the Section 216 Study and the Section 217 
Study:
    (i) Any studies, research, empirical data or other information 
supporting any comments on any of the foregoing questions, where 
available; and
    (ii) Any additional factors or considerations that should be taken 
into account in either the Section 216 Study or the Section 217 Study.

    By order of the Board of Governors of the Federal Reserve 
System, April 20, 2011.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 2011-9986 Filed 4-28-11; 8:45 am]
BILLING CODE 6210-01-P


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